Some senior economic experts in major Canadian banks warn the federal government that, economically, the record population growth in Canada through immigration is unsustainable, unjustified, and cannot continue at this pace in 2024.

The chief economist at "National Bank of Canada" (BNC), Stefan Marion, speaks decisively on the subject.

"The Canadian economy has the capacity to absorb between 300,000 and 500,000 individuals annually," says Marion, "and exceeding this level creates all kinds of pressures: problems in infrastructure, in availability of spots in daycare centers and schools, and in real estate development."

Senior Vice President and chief economist at "Scotiabank," Jean-François Perrou, shares this viewpoint.

"We have not made the necessary investments to be able to absorb all these people without causing consumers to lose their ability to afford costs," says Perrou.

Both economists, who participated in the annual banquet of the "Economic Club of Canada" with their counterparts from other major Canadian banks yesterday, pointed to the pressure imposed by the sharp population growth on the residential real estate market at a time when supply shows a significant shortage to meet needs.

"This does not mean that immigration is bad for Canada," Marion emphasizes, "on the contrary, it is very good, but there are levels that have been exceeded in a way we have not seen before. So yes, there is a problem of losing control over immigration policy and it must be corrected."

The impact on unemployment

Marion adds that the rapid population growth in Canada is partly responsible for the increase in the unemployment rate, "which means that people are entering the labor market, but they will face greater difficulty finding a job."

Although the Canadian economy created nearly 500,000 jobs last year, according to data from Statistics Canada, the unemployment rate rose from 5% in January 2023 to 5.8% in December.

This is an unusual situation according to Perrou. "This happened because the number of workers in Canada now is much larger than it was a year ago, and not all these people have found jobs yet."

In its forecasts, the "National Bank of Canada" sees the unemployment rate rising to 7% in 2024.

But Perrou's expectations from "Scotiabank" are slightly more optimistic, expecting an unemployment rate of 6.7% this year.

"Clearly, the economy is slowing: employers are expected to lay off a few employees, which is normal (in such cases) but it is more affected by the reality that the active population is increasing," says Perrou.

Aging society

In an analytical report published a week ago, the cooperative bank "Desjardins Movement" (Mouvement des Caisses Desjardins) pointed out that the repercussions of strong demographic growth are varied.

The report's author, the bank's chief economist Marc Desormeaux, says that this population growth could lead to "stimulating consumption and possibly rekindling inflation."

On the other hand, by partially filling the labor shortage caused by population aging, the "demographic boom can also help increase the supply of available workers and reduce potential inflation that could result from wage increases," Desormeaux adds in his analysis.

But Stefan Marion argues that replacing retired workers with younger ones cannot justify the levels of immigration recorded in 2023.

"There are 200,000 workers retiring every year in Canada, then we talk about a population growth policy currently at 1.2 million people. So it is clear we have far exceeded the numbers related to aging population," says Marion.

It is noted that according to estimates by Statistics Canada, the population of Canada increased by 1.25 million between the last quarter of 2022 and the last quarter of 2023.

Data released less than a month ago by Statistics Canada indicates that Canada's population is now estimated at about 40,528,396 people, an increase of 430,635 during the third quarter of 2023, or 1.1% compared to the population at the end of the second quarter of this year. This increase is 96% due to immigration.

Thus, the population growth rate in Canada is more than five times higher than the rate of population growth in the countries of the Organisation for Economic Co-operation and Development (OECD).